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I. ( a ) what is the future worth of the following cash flow diagram? 1-3% GAP -0 s-so -3.0 G AP 21-2. (b) A

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I. ( a ) what is the future worth of the following cash flow diagram? 1-3% GAP -0 s-so -3.0 G AP 21-2. (b) A major project of 10 million will be funded from two sources, 4 million from retained earnings and the rest from a bank loan. The bank loan is 6% per year compounded monthly. The company earnings per share are .75 per share with a share price of 11.00. Show in some detail the calculation of the weighted average cost of capital and include the effects of compounding in the bank loan portion of the calculation. (c) Your bank account pays 6% interest on your deposit, but after careful analysis you find your real increase in purchasing power with this money is the equivalent of 5%, what is the inflation rate

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